- 20 -
consistency precludes decedent’s estate from now taking the
contrary position, upon which its claim for refund is predicated,
that decedent possessed no general power of appointment.12 As
explained below, we disagree.
As developed in caselaw, the duty of consistency (sometimes
called quasi-estoppel) prevents a taxpayer from benefiting in a
later year from an error or omission in an earlier year that
cannot be corrected because the time to assess tax for the
earlier year has expired. Estate of Letts v. Commissioner, 109
T.C. 290, 296 (1997), affd. without published opinion 212 F.3d
600 (11th Cir. 2000). The duty of consistency may apply if: (1)
The taxpayer made a representation of fact or reported an item
for tax purposes in one tax year; (2) the Commissioner acquiesced
11(...continued)
the marital deduction even though the spouse is given no power
over the property’s ultimate disposition. H. Rept. 97-201, at
159-160 (1981), 1981-2 C.B. 352, 377-378; see Estate of Cavenaugh
v. Commissioner, 100 T.C. 407, 415 (1993), affd. in part, revd.
in part on other grounds and remanded 51 F.3d 597 (5th Cir.
1995). The Internal Revenue Code specifically requires that if
the spouse still holds the QTIP at death, its value must be
included in the spouse’s gross estate. Sec. 2044. By contrast,
the Internal Revenue Code contains no specific provision (apart
from the general rule of sec. 2041(a)(2), which brings into the
gross estate property with respect to which the decedent has a
general power of appointment) requiring property transferred
pursuant to sec. 2056(b)(5) to be included in the spouse’s gross
estate.
12 Respondent raised the duty of consistency as an
affirmative defense and consequently has the burden of showing
that it applies. See Rule 142(a); Hull v. Commissioner, 87 F.2d
260, 262 (4th Cir. 1937), revg. 33 B.T.A. 178 (1935).
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011